RELATIONSHIP BETWEEN INNOVATION ACTIVITY AND CUSTOMER COLLABORATION IN SMEs: TECHNOLOGICAL AND BUSINESS UNCERTAINTY

Abstract

The environment surrounding small- and medium-sized enterprises (SMEs) has changed dramatically due to rapid technological advances and the global and domestic impacts of pandemics and regional conflicts. This study identifies the relationship between customer collaboration and innovation activity under this environment. Our hypothetical model is based on relational view and analyses the relationship between customer collaboration, technological and business uncertainty, and innovation activity, which is divided into incremental/radical goods and services. We conduct a survey of Japanese SMEs (suppliers) in industrial markets. The results of our analysis using structural equation modelling highlight that customer collaboration is overall positively associated with SME innovation activity. Further, different types of uncertainty may affect customer collaboration and innovation activities differently. In sum, this study interprets the relationship between customer collaboration and innovation activities using the theoretical framework of relational view and provides insights into the possible impact of environmental uncertainties on this relationship.